Morphlabs Tries to Reinvent Private Cloud Pricing

Los Angeles-based startup Morphlabs is rolling out two new features designed to bolster sales of its mCloud line of cloud computing software in a crowded field of management platforms. In doing so, however, it might actually be helping demonstrate the future model for internal-cloud software pricing.

mCloud On-Demand lets users manage Amazon EC2 instances using the same dashboard, and receiving the same benefits, as the on-premise mCloud product. This means building in fault tolerance, creating three-tier web architectures and the use of a graphical design tool, among other things. However, mCloud On-Demand will soon be compatible with additional clouds — including OpenStack-based clouds (Morphlabs is a contributor) –enabling hybrid environments that span cloud providers and user data centers. “The message of mCloud On-Demand,” said Morphlabs founder and CEO Winston Damarillo, “is that your provider is just another source of virtual machines, and you can glue them however you want.”

Morphlabs’ other news is its partnership with Zend around the Zend Server web server for PHP applications. Through a technology integration, Zend will be able to bill mutual customers on a pay-per-use basis, as opposed to its current license model, with Morphlabs handling the metering aspect. Damarillo says Morphlabs is in talks to bring middleware providers and other application vendors into the fold, as well. He thinks, probably accurately, that ISVs will need a bridge to move to a cloud-like billing model, and cloud software providers are in a good position to provide this. Many public cloud providers (e.g., Rackspace, GoGrid and Heroku) offer partner marketplaces, but Morphlabs’ plan is fairly unique among cloud software vendors.

It’s this type of billing for traditional software products, as well as Morphlabs’ 1-cent-per-hour price tag for mCloud On-Demand, that might foretell the future of cloud pricing. For software vendors, it’s an opportunity to adapt to the cloud without much heavy lifting, and to potentially make more money. As Damarillo points out, using the retail vs. wholesale analogy, pay-per-use billing might actually earn software vendors more revenue depending on the price per hour and actual usage.

For cloud software providers like Morphlabs, the trick is getting customers in the door. At 1 cent per machine per hour, Morphlabs On-Demand won’t drive huge revenues except at a major scale, but it will attract users. It’s similar to Amazon Web Services’ recent decision to give away a year’s worth of Micro Instance use (sub req’d). Once they’re in, it’s easier to transition customers over to higher-profit offerings. What’s promising about the Morphlabs approach is that, unlike the free, stripped-down products offered by many cloud software startups, mCloud On-Demand is really cheap but full-strength in terms of features.

However, as I said upon Morphlabs’ product launch in April, it’s an innovative company in a crowded market. Low barriers to entry, a strong partner ecosystem and OpenStack compatibility won’t don’t hurt its chances, though.

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